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In a move that will rock the next generation of console gaming, Sony is close to agreeing an acquisition of a high profile cloud gaming firm, MCV understands.

It was reported earlier this week that Sony was to reveal a partnership with a cloud gaming firm – specifically either OnLive or Gaikai – at E3 next week.

Subsequent chatter had seemingly calmed the rumours, suggesting that the proposed agreement was to do with Sony streaming TV services, and not consoles.

However, MCV understands that the deal is far more extensive than anyone could have predicted and will see Sony fully acquire one of the two firms. The deal, our source says, “is close to being signed”.

An interesting suggestion from the article: "Although work on PS4 is already well underway, Sony is very likely keen on bringing its PlayStation gaming content to non-console owners – a move finally made possible by this deal."

Sony is enticing the entire world by announcing their plans for this year's major industry event. First and foremost, they say they will announce "the future of gameplay and innovation," which has gotten people talking.

Cloud gaming service Gaikai has commented that one of the current console manufacturers actually won't be creating another console for the next generation. Speaking during CES [Update: here's coverage of the full panel she was on], Nanea Reeves, chief product officer for Gaikai, predicted, "Not all of the current console makers will have one more generation. That will be the big news at E3."

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BasilZero said:Sorry this might be a noob question...but what exactly is cloud gaming ;x?

Instead of local processing hardware (your console) playing the game, your controller inputs are sent to a remote location where all the proccessing is handled, and then 'video' of that game is streamed right back to your tv.

It means that the power of the device you're playing on does not matter, as all the proccessing is handled at another location. The only thing determining the quality of the games is your internet connection.